The Federal Reserve Bank of New York uses a procurement process described in Operating Bulletin 10 that is designed to result in the acquisition of quality goods and services at the most favorable terms through competition. The process seeks to permit any interested and qualified potential vendor to participate in order to achieve the maximum feasible competition. The process used by the Bank is also followed by the other Reserve Banks and is modeled on a policy originally drafted by a task force of the American Bar Association for use by State and local governments.

The heart of the process is a written request for proposals (“RFP”) that describes in detail the goods and services that are required and the criteria that will be used in selecting the winning proposal. Proposals are required to be submitted in writing and in confidence prior to a strict deadline. Proposals are not opened until after the deadline and late proposals are not considered.

OB 10 requires the specifications of the good and services to be acquired to be written in a manner that does not favor a particular vendor. The specifications must not be unduly restrictive in order to promote economy and encourage competition. The specifications may also designate certain requirements as being mandatory such as a requirement that an automation system be compatible with another automation system that the Bank is using.

An RFP must state the evaluation criteria that will be used to determine which offeror is selected. Selection criteria generally include quality, experience, and price factors and the RFP is required to state the relative weight to be given to each evaluation criteria.

The Bank seeks to avoid giving any potential offeror an unfair advantage by releasing information about the RFP to all potential offerors at the same time. Competition is encouraged by distributing the RFP to as many potential offerors as is compatible with efficiency and economy.

Bank employees involved in an acquisition must avoid conduct which gives rise to an actual or apparent conflict of interest. To ensure compliance, Bank employees who will be reviewing proposals or participating significantly in the process must complete an annual briefing on Section 208 of the Conflicts of Interest statute. Individuals evaluating proposals are also restricted in the contact they may have with vendors during the evaluation period. If negotiations are conducted with the potential winning vendors, the negotiations must be conducted in a manner that is fair and equitable and does not compromise the integrity of the competitive process. After negotiations, each of the leading vendors must submit a best and final offer following the same protocol as applies to the submission of proposals.

In evaluating proposals, the Bank first eliminates any proposals that do not meet any mandatory requirements of the RFP. The Bank will also eliminate a proposal from a vendor that the Bank does not consider to be “responsible” meaning a vendor that does not possess the skill, ability, financial, and other resources, and integrity necessary for the faithful performance of the work or who has not complied with all requirements for eligibility set forth in the RFP.

Proposals that have survived this review process are then evaluated based on the specified evaluation criteria and the weights assigned to each criteria. The successful vendor is notified and unsuccessful vendors are informed of the bottom line price of the winning vendor and the reason the losing offers were not accepted.

The successful vendor must also comply with the Bank’s Vendor Integrity Program which screens vendors for business and security purposes. Vendors must submit information regarding the vendor’s finances, business practices, reputation, and employees which are screened against credit, court, and law enforcement databases. The Bank’s Credit and Risk Management Group also performs a credit evaluation of the vendor for contracts over threshold amounts or durations. Vendors may be eliminated based on either the VIP or the credit evaluation or modifications of the contract may be made to deal with the issues raised.